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Growth stocks |
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Growth stocksStocks whose earnings have grown at an above average rate over a number of years and which are expected to continue to grow at a high rate for some time to come.Growth stocks usually trade on higher P/E ratios than non growth stocks, but their share prices also tend to be more volatile, which means they are inherently more risky than other stocks. If their growth falters, the market may punish them by marking down the share price severely.Because their primary attraction is capital growth, growth stock companies are often not expected to pay dividends. The reasoning is that the shareholders are better served by the money being invested back into the company. This is fine if the company delivers on its growth promises, as increases in earnings will, if the P/E stays the same, result in higher share prices. But if the company fails to deliver on its promises, investors will not only miss out on the capital appreciation they expect, but won't even have dividend income to compensate.Similar MatchesStability and Growth PactStability and Growth PactThe 1997 agreement among the countries participating in the EMU to coordinate their fiscal policies in a way that would limit budget deficits and debt. Dividend growthDividend growthThe amount by which a company's yearly dividends grow compared with the previous year. Exogenous growthExogenous growthEconomic growth that occurs without being the result of deliberate policy or behavior. The term arises because neoclassical growth models converge to a steady state in which per capita income is constant over time. Growth, then, requires exogenous technical progress. Sustainable growth rateSustainable growth rateMaximum rate of growth a firm can sustain without increasing financial leverage. Growth fundGrowth fundA mutual fund that invests primarily in stocks with a history of and future potential for capital gains. Further SuggestionsAggressive growth mutual fundgrowth and income fund Export led growth growth fund Growth rates Internal growth rate organic growth Neoclassical growth model Economic growth rate Growth stock Growth opportunity price earnings growth factor Growth Economic growth Growth phase growth investing Constant growth model Full Employment and Balance Growth Act of 1978(Humphrey Hawkins Act) capital growth Growth and income fund Normal growth firms Engine of growth Compound growth rate compound annual growth rate Immiserizing growth |
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